The Postwar Economy: 1945-1960

As the Cold War unfolded in the decade and a half after World War
II, the United States experienced phenomenal economic growth.
The war brought the return of prosperity, and in the postwar
period the United States consolidated its position as the
world's richest country. Gross national product, a measure of
all goods and services produced in the United States, jumped
from about $200 thousand-million in 1940 to $300
thousand-million in 1950 to more than $500 thousand-million in
1960. More and more Americans now considered themselves part of
the middle class.

The growth had different sources. The automobile industry was
partially responsible, as the number of automobiles produced
annually quadrupled between 1946 and 1955. A housing boom,
stimulated in part by easily affordable mortgages for returning
servicemen, fueled the expansion. The rise in defense spending
as the Cold War escalated also played a part.

After 1945 the major corporations in America grew even larger.
There had been earlier waves of mergers in the 1890s and in the
1920s; in the 1950s another wave occurred. New conglomerates --
firms with holdings in a variety of industries -- led the way.
International Telephone and Telegraph, for example, bought
Sheraton Hotels, Continental Baking, Hartford Fire Insurance,
and Avis Rent-a-Car, among other companies. Smaller franchise
operations like McDonald's fast-food restaurants provided still
another pattern. Large corporations also developed holdings
overseas, where labor costs were often lower.

Workers found their own lives changing as industrial America
changed. Fewer workers produced goods; more provided services.
By 1956 a majority held white-collar jobs, working as corporate
managers, teachers, salespersons and office employees. Some
firms granted a guaranteed annual wage, long-term employment
contracts and other benefits. With such changes, labor militancy
was undermined and some class distinctions began to fade.

Farmers, on the other hand, faced tough times. Gains in
productivity led to agricultural consolidation, as farming
became a big business. Family farms, in turn, found it difficult
to compete, and more and more farmers left the land.

Other Americans moved too. In the postwar period the West and the
Southwest continued to grow -- a trend that would continue
through the end of the century. Sun Belt cities like Houston,
Texas; Miami, Florida; Albuquerque, New Mexico; and Tucson and
Phoenix, Arizona, expanded rapidly. Los Angeles, California,
moved ahead of Philadelphia, Pennsylvania, as the third largest
U.S. city. By 1963 California had more people than New York.

An even more important form of movement led Americans out of
inner cities into new suburbs, where they hoped to find
affordable housing for the larger families spawned by the
postwar baby boom. Developers like William J. Levitt built new
communities -- with homes that all looked alike -- using the
techniques of mass production. Levitt's houses were
prefabricated, or partly assembled in a factory rather than on
the final location. The homes were modest, but Levitt's methods
cut costs and allowed new owners to possess at least a part of
the American dream.

As suburbs grew, businesses moved into the new areas. Large
shopping centers containing a great variety of stores changed
consumer patterns. The number of these centers rose from eight
at the end of World War II to 3,840 in 1960. With easy parking
and convenient evening hours, customers could avoid city
shopping entirely.

New highways created better access to the suburbs and its shops.
The Highway Act of 1956 provided $26 thousand-million, the
largest public works expenditure in U.S. history, to build more
than 64,000 kilometers of federal roads to link together all
parts of the country.

Television, too, had a powerful impact on social and economic
patterns. Developed in the 1930s, it was not widely marketed
until after the war. In 1946 the country had fewer than 17,000
television sets. Three years later consumers were buying 250,000
sets a month, and by 1960 three-quarters of all families owned
at least one set. In the middle of the decade, the average
family watched television four to five hours a day. Popular
shows for children included Howdy Doody Time and The
Mickey
Mouse Club; older viewers preferred situation comedies like
I
Love Lucy and Father Knows Best. Americans of all
ages became
exposed to increasingly sophisticated advertisements for
products said to be necessary for the good life.